Nevada regulators approve order to lower rates for NV Energy

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Correction: An earlier version of the headline and post incorrectly said the PUCN was mulling a draft order. They approved it unanimously at the end of December.

Dive Brief:

The Public Utilities Commission of Nevada has unanimously approved a draft order in December that cuts rates for customers in the southern part of the state, lowers the return on equity for NV Energy and signals recognition of the benefits of distributed solar.

The order would lower fixed monthly fees for customers of Nevada Power, NV Energy's subsidiary, from $12.75 to $12.50 per month. Though it ultimately withdrew the request, the utility originally sought a 31% increase to those fees. The order would also lower volumetric fees.

"Voices of Nevadans have been heard," the order states in an apparent nod to policy reversals that favor consumers and celebrates additional renewables on the system.

Dive Insight:

For a proposed rate decision, the PUCN's order sounds downright philosophical at times. Considering the state axed net energy metering (NEM) rates in 2015 before restoring them in 2016, the new tone paired with potentially lower rates is significant.

"The future of NEM rooftop solar in Nevada is currently a roadmap with a blank space — a lot of value and opportunity to build a bright future is there," the order reads. It leaves the current time-of-use rates unchanged, as a separate proceeding has been opened to examine the marginal cost of service. And it notes that 5 MW of rooftop solar has been installed, and another 16 MW applied for, since the PUCN began publicly tracking installations.

The order would cut $30 million from Nevada Power's revenue request and would lower customer bills about 2% each month. While regulators acknowledge it is a "relatively modest" reduction, they also noted it is the first of its kind since 1979.

"It is important to note that this rate decrease is occurring while historic levels of NEM rooftop solar are being installed, the closure and cleanup of coal plants are being accelerated, and new energy laws are being implemented," the order reads. "Voices of Nevadans have been heard."

The order also looks at debate over fees major corporate customers are paying to exit Nevada Power's service.

MGM, Ceasars, Switch and Wynn paid or will pay a combined $178 million to exit the utility's service and purchase power supply on the power market. However, there has been concerns for whom those funds are benefiting—ratepayers or other businesses. "Greater transparency and and accountability on how the impact fees are allocated is essential to restoring trust between Nevada Power" and customers, regulators said.

Liability for costs related to the closure of the Reid Gardner coal units will be deferred for those companies, and regulators directed a new cost study for Nevada Power's next general rate case — the first in over 35 years, according to the order.